UK's Deliveroo declares 9% workforce cut due to record inflation

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Deliveroo, a UK-based app that went public in 2021 with funding from Amazon.com Inc., will cut around 9 percent of its employees amid record-high inflation and recession concerns in the country, CEO Will Shu said on Thursday.  

"We are starting a redundancy process across the company which could see around 9% of the company's workforce (approximately 350 roles) leave, although we expect this to be closer to 300 with redeployments," Shu said in a statement released by Deliveroo, adding that the company works in a highly competitive industry and is witnessing a difficult consumer environment in most of its markets.  

"We are experiencing record high inflation, rising interest rates, an energy crisis and fears of a recession in the UK. We have to run our business in the most efficient way possible to withstand these challenges, and take a hard look at our cost base," the statement added.  

This step aims to ensure a constant shift toward greater effectiveness, less friction in the company's structures and quicker decision-making to allow it to navigate an uncertain period.  

In a statement released by the House of Commons treasury committee early in January, the IMF warned that the British public will be passing through torrid times as the new fiscal plan tries to counteract inflation during times of recession. This dire situation is assessed to be the result of the skyrocketing energy prices. 

The inflation rate has hit a four-decade high, increasing to 11.1%, and the government explained the reasons for this economic downturn as being due to the Covid pandemic and the war in Ukraine.

The retail industry in #Britain had a "brutal" year in 2022, with more stores closing than at any other time in the previous five years. Industry groups predict that 2023 will be just as difficult.#Inflation pic.twitter.com/niL09Hljyk

— Al Mayadeen English (@MayadeenEnglish) January 5, 2023

In November, The Bank of England raised interest rates to 3%, increasing from 2.25% - the biggest increase since 1989, as it warned of a "very challenging" outlook for the economy.

Forecasts from the bank predict that the UK will be enduring 40-year-high inflation, reaching 11% during the incumbent quarter. However, Britain has already entered a recession that may last up to 2 years - even longer than what it endured during the 2008-09 financial crisis.

The bank's interest hike is the biggest in 33 years. However, it affirmed the predictions of many economists, according to a Reuters poll. 

The central bank predicted that the UK entered a recession in the third quarter of 2022, and the recession will be ongoing until mid-2024.

UK water bills to jump by 7.5%, up to 448 pounds

Water bills are expected to witness a 7.5% increase, which amounts to an increase from 31 pounds ($38) to 448 pounds as of April 1 in households in Wales and England.

The Water UK industry body said earlier this month that this poses the highest jump in nearly 20 years, adding: "Average yearly water and sewerage bills in England and Wales are forecast to rise by £31 (7.5%) to £448 in the forthcoming year, below inflation (November CPIH inflation, which regulators set as the benchmark, was 9.3%). Water bills remain lower, in real terms, than they were a decade ago." 

The UK has suffered one of the worst inflation consequences, with major union strikes, price increases, and bill hikes. 

According to a new survey, Britain's reliance on government benefits has hit an all-time high, with more than half of households receiving more from the government than they pay in taxes.

Due to the long-term inflationary consequences of the pandemic and turmoil in Ukraine, the UK will, according to a Financial Times report, experience one of the longest recessions and the worst recoveries among G7 economies throughout 2023.